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Colonial Williamsburg Facts

Why is the restructuring necessary?


The Foundation faces serious financial challenges. In 2016, we suffered operating losses
of $54 million or $148,000 per day. While thats down from the $176,000 we lost in
2014, were still regularly losing an amount of money thats not sustainable. These losses
over the last decade have resulted in the Foundation drawing down its endowment to the
point the funds available to cover operating losses could be exhausted in as little as eight
years. This is unacceptable and it is unsustainable.

How much will the Foundation save with the restructuring?


The immediate goal of the restructuring is to stabilize the Foundations finances so that
we will no longer need to make excess withdrawals from our endowment to cover
operating losses. We believe that with the plan we are implementing, we can achieve that
goal by 2019. When the restructuring plan has been fully implemented, we expect
financial improvement in the tens of millions of dollars, which will allow us to stop
making excess endowment withdrawals and to reinvest in our core mission.

What is the effect of the restructuring on the Foundations employees?


As part of a comprehensive plan to stabilize Colonial Williamsburg's finances so we save
this treasure and continue its core mission, 71 people will be leaving the Foundation by
the end of the year. Another 262 employees will be moving, if they so choose, to work
for the companies we have contracted with to manage the operation of the Foundations
retail and golf facilities, landscaping and facilities maintenance. Those companies have
agreed to hire and retain eligible employees for at least the next year. The Foundation
negotiated this provision into the outsourcing contracts. Employees departing this month
will receive a generous severance package, an additional month of health care, and a
variety of transition services offered in partnership with national HR experts at Lee Hecht
Harrison.

How were the restructuring decisions made?


The restructuring plan was developed and prepared by President and CEO Mitchell
Reiss, working with members of the Board of Trustees, senior management and expert
outside advisors, many of whom lent the Foundation their time free of charge. Reiss
presented the plan to the Board, which unanimously endorsed it at its April meeting.

What functions are being outsourced to outside agencies? Who are the agencies?
We are in final negotiations to have the following operational functions managed by
outside companies. They have agreed to hire our staff and retain them for at least one
year:
Kemper Sports, Golf operations
Aramark, Products and retail management
Brightview, Landscaping
WFF, Facilities management

How will the Foundation measure the success of this plan?


Success will be measured two ways. First, there is the essential financial aspect to the
plan -- it has to place the Foundation on a stable and sustainable financial pathway. But
financial sustainability is only a means to a more important end. Second, the plan also
has to allow us to renew our commitment, and devote more time, attention and resources,
to supporting and enhancing our core mission.

How much money did CWF lose last year? Last 5 years?
The Foundation lost $54 million from operations in 2016, and $277 million over the past
five years. In addition, in 2016 the Foundation paid $17 million servicing its debt.

What steps were taken to preserve jobs?


Even though the Foundation faces serious financial challenges, we have done everything
possible to keep layoffs to a minimum. We found positions elsewhere in the Foundation
for 22 employees whose current positions are being eliminated as part of the
restructuring. In addition, we negotiated with the outsourcing firms that will be taking
over certain operations to employ and retain 262 qualified employees for at least a year. It
is important to note that we avoided any layoffs in our customer-facing, front-line
Historic Area interpretive staff.

Is the Foundations leadership taking pay cuts as part of the restructuring?


The senior teams pay has been frozen for the past three years. There are also fewer
senior leaders at the Foundation today than three years ago.

How is the Foundation helping those who are losing their jobs?
Regrettably, some employees will be leaving the Foundation as part of this critical effort
to stabilize the Foundations finances for the long term. No one likes to see a colleague or
a neighbor lose his or her job. Its upsetting. Its painful. We are committed to making
this transition as easy as possible for those who are leaving. Employees departing this
month will receive an additional month of health care and all employees will receive a
generous severance package and a variety of transition services offered in partnership
with national HR experts at Lee Hecht Harrison, incuding a 90-day on-site career
counseling center that will provide an array of outplacement services, such as resume-
building, skills workshops, interview training, and job leads.

What is the value of the Colonial Williamsburg endowment?


The endowments current value is approximately $684 million, but approximately half of
it is restricted for specific purposes as directed by donors. The other can be used to cover
operational losses. Based on our current losses, we anticipate that the portion of the
endowment available to fund operations will run out in eight years, if not sooner.

What is the endowments annual distribution percentage and amount?


Until 2007, the Foundation withdrew a standard 5% of its endowment annually. That year
the Board changed the policy to withdraw 6% annually. Because of annual operating
losses, the Foundation has had to take a supplemental withdrawal from the endowment
above 6%; in recent years, the percentage has been as high as 12.4%. In the past decade,
the Foundation has withdrawn $639.6 million from the endowment, with almost $200
million of that amount coming in the form of supplemental draws above 6%. This is
clearly unsustainable.